ERS ltd is a company engaged in the manufacture of sports shoes. The last financial

year to $31$ January has seen the company produce its lowest profit for five years.

The summary profit and loss account for the year to $31$st January is set out

below :

K K

Sales revenue $(50,000$ shoes @ K$70)3,500,000$

Cost of sales

Direct materials $1,400,000$

Direct labour $1,150,000$

Variable manufacturing overheads $200,000$

Fixed manufacturing overheads $410,000$

Total manufacturing costs $3,160,000$

Gross profit $340,000$

Selling and distribution overheads $($Fixed$)134,000$

Administration cost $148,400$

Net profit $57,600$

REQUIRED:

Compute the break$-$even level of activity and revenue to break$-$even on the basis of

last year$$s results.